Introduction to Macroeconomics - Part 1

Introduction to Macroeconomics - Part 1

Overview

This tutorial describes how GDP can be measured. It shows how to calculate real GDP from nominal GDP figures, and outlines the chain-weighted technique. The tutorial explains the Theory of Income Determination. We look at the definition of inflation and various methods of measuring inflation. It provides information on important consumer price indexes worldwide and examines the causes of inflation. The tutorial also looks at the various costs to the economy associated with inflation. This tutorial looks at the different types of unemployment that occur in global economies and also explains the theories of unemployment.

Objective

On completion of this tutorial, you will be able to:- Measure GDP using three different approaches (expenditure, income, and production), and distinguish between real and nominal GDP- Describe the factors that determine the level of GDP as outlined by the Theory of Income Determination- Determine the effect on GDP of changes in the marginal propensity to consume, the rate of taxation, and the marginal propensity to import- Define and measure inflation- Describe the theories of the causes of inflation- Identify the costs of inflation - Define unemployment and describe the potential problems with the unemployment rate as a measure of unemployment- Describe the types of unemployment and their causes- Identify the costs of unemployment